Wednesday, December 8, 2010

The Monster: How a Gang of Predatory Lenders and Wall Street Bankers Fleeced America--and Spawned a Global Crisis / by Michael W. Hudson

When the Lehman Brothers holding corporation declared a Chapter 11 on September 15, 2008, it caused more than just a blip on the radar. With the abrupt implosion of this company and, soon afterwards, other subprime mortgage lenders along with the bankruptcy of several other well-known Wall Street firms, the world witnessed a financial disaster rarely glimpsed in history. The crisis cost over $20 trillion in government fiscal aid, caused millions of people to lose their jobs, millions more to lose their homes and nearly incited an all out financial collapse of US and International markets. It's after effects would linger for two years and its reverberations are still being felt. Through exhaustive research and extensive interviews with financial insiders, politicians, academics and even former Wall Street "hitmen", veteran financial reporter Michael Hudson reveals the story of the rise and fall of the subprime mortgage business by chronicling the plight of its two most powerful conglomerates: Ameriquest and Lehman Brothers..The situation was as preventable as it was lamentable. As the biggest subprime lenders, Ameriquest and Lehman had the most control and the most power; and, subsequently, the most to lose. It was these two companies which, more than any other institutions, instigated the cesspool of corruption by cultivating a toxically unethical environment involving predatory lending policies, high risk home loans and shady backdoor banking practices, to say nothing of the hard-living, vice-loving expensive after hours habits of many employees. Risky home loans created high-profile housing markets but also made for an escalating insecure lending system between investment banks, mortgage companies and credit rating bureaus. Soon this housing bubble led to a destabilized banking structure which taxed its parent holding companies to the point of liquidation and eventually took its toll on the US economy, which ultimately had to be rescued by a hefty government bailout in 2008. Though a complex problem with complicated aspects, the book is an entertaining read highlighted by a thoroughly putrid cast of characters of which many victims of the crisis have come to loathe. Provocative and gripping, The Monster is a searing exposé of the fraud, corruption and greed that fueled the financial collapse of which the country and the world is only now climbing its way out of. (332.63 HUDSON)